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Finance Minister Michael Sarris said "significant progress" had been made in talks in Nicosia with officials from the European Union, European Central Bank and International Monetary Fund.

He confirmed discussions were centered on a possible levy of around 25 percent on holdings of over 100,000 euros (about $130,000) at Bank of Cyprus, and expressed hope that a package could be ready by the end of the day for approval by parliament.

http://worldnews.nbcnews.com/...

Nicosia is a divided Cyprus city since the 1974 invasion by Turkey which still holds one-third of Cyprus in its control.  History below.

From WaPo:

Cyprus has been told it must raise 5.8 billion euros ($7.5 billion) in order to secure 10 billion euros in rescue loans from other European countries that use the single currency, and from the International Monetary Fund.
A 2:1 deal?  Cyprus will get approximately 2 euros for every 1 euro it expropriates.  Does that mean that Cyprus banks will end up with a net 5 billion euros?  If so, will that really be enough, especially if the big players pull out?  I don't get this high finance at all.

Oh My Gosh!  In what universe can this be deemed legal?

The riots are starting to happen.  I think we would riot at a hint that 25% of our savings were going to be heisted to serve the deficit.

Cyprus.  Another place where the Kissinger/US have created chaos.  This is a great snapshot history of what happened.

Cyprus deposit details

These are all short term fixes for Cyprus’s overfed, undercapitalized banks.

Cypriot leaders fear the damage the levy would do to the country’s offshore banking industry. The tottering banks hold 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros – enormous sums for an island of 1.1 million people which could never sustain such a big financial system on its own.

With the Island’s GDP at $24 billion, there are almost 3 times as much in bank deposits as the entire economy is worth. They are going to have to address that fundamental problem if they expect to put their financial house in order.

Calling it a tax is such a sham.  The savings were created and taxed before tucked into the bank account.  Tax is paid on the interest.

Taking the principal is highway robbery.

Greece and Cyprus have something else in common.  The Orthodox Church which doesn't recognize Roman Catholicism, but I'm sure that has nothing to do with this present economic terror they are experiencing.

Poll

Can it happen here?

75%107 votes
24%34 votes

| 141 votes | Vote | Results

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Comment Preferences

  •  Gross. nt (4+ / 0-)

    I see what you did there.

    by GoGoGoEverton on Sat Mar 23, 2013 at 08:09:23 AM PDT

  •  What Are They Proposing Taking From Smaller (7+ / 0-)

    accounts?

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Sat Mar 23, 2013 at 08:14:34 AM PDT

  •  It's the precedent that scares me. (23+ / 0-)

    Once one government starts doing this, how long before another comes along?

    What's your military connection?

    by angelajean on Sat Mar 23, 2013 at 08:16:06 AM PDT

    •  this is worse than the original idea (5+ / 0-)

      now at 25% there is no way the banks will survive.  

      Foreign investors will scream at this.

      "The only person sure of himself is the man who wishes to leave things as they are, and he dreams of an impossibility" -George M. Wrong.

      by statsone on Sat Mar 23, 2013 at 08:29:10 AM PDT

      [ Parent ]

      •  Fuck'em (2+ / 0-)
        Recommended by:
        waterstreet2008, Ice Blue

        They are not investors they are tax evaders from Russia. Banks will survive but obviously not as the tax shelters they were when Cyprus a country not particularly wealthy of a million people had 87 billion euros in bank deposits!!!

      •  To be honest, at this point they should (2+ / 0-)
        Recommended by:
        AoT, Claudius Bombarnac

        go for 100% of savings over 100,000 eruo.  If they are gong to be hanged they may as well be hanged for lions as for sheep.

        "It was believed afterward that the man was a lunatic, because there was no sense in what he said." "The War Prayer" by Mark Twain

        by Quanta on Sat Mar 23, 2013 at 10:44:53 AM PDT

        [ Parent ]

        •  The real solution is to simply allow the (1+ / 0-)
          Recommended by:
          nchristine

          'Invisible Hand' to operate as it should in a truly free market. The banks need to go under with depositors only getting their insured amounts returned. To date, it has been mainly the less wealthy who have paid the price for the banker's greed fueled manipulations.

          The current "too big to fail" banking model makes a mockery of moral hazard. The end result of bailing them out with public funds could entail a complete collapse of the world's monetary system in the not-so-distant future.

    •  That's not the main problem. (9+ / 0-)

      The reason why this levy is such a flat-out dumb idea is that it is an open invitation to a bank run, since no one really believes that this will be a one-off deal, as our European policy seems to run on the principle of "whatever gets conservative Northern European politicians reelected."

      You might - might! - be able to pull this off with relatively little trouble in a country with rock-solid political institutions, a high degree of public participation and consensus in politics, and a reputation for living up to its promises. Cyprus? Not so much.

      Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

      by Dauphin on Sat Mar 23, 2013 at 08:30:52 AM PDT

      [ Parent ]

    •  I share your concern 100%... (1+ / 0-)
      Recommended by:
      angelajean

      I don't mind equitable income taxation, but wealth confiscation is unacceptable...against the rich or otherwise. To a scary place this line of policy making leads.

      Adequate health care should be a LEGAL RIGHT in the U.S without begging or bankruptcy. Until it is, we should not dare call our society civilized.

      by Love Me Slender on Sat Mar 23, 2013 at 03:31:26 PM PDT

      [ Parent ]

  •  Well, strictly speaking, we have other ways (20+ / 0-)

    of committing theft against our savers.  Near-zero interest rates while inflation remains real and fraudulently underreported, for one thing -- "monetizing the debt" on the backs of the "little people."

    And unlike Cyprus, we can invent money out of nothing, which may just bring us back to inflation.  Fortunately (and I say this with bitter irony), the nature of just such a practice, lately euphemized as "quantitative easing," doesn't raise the risk of inflation because the money is never circulated to real people for use.

    Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

    by corvo on Sat Mar 23, 2013 at 08:17:05 AM PDT

    •  Then there are the insedious (sp??) bank fees (8+ / 0-)

      lots of them are charging.  Things like min balance fee, atm use (or not use), withdrawal fee, balance checking fee, and any other thing I can't think of right now fee.

    •  Near zero interest is killing the retired ppl (6+ / 0-)

      As principle will have to be used to pay real estate taxes, forcing them out of their homes.

      The American Dream, yeah, right

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Sat Mar 23, 2013 at 08:23:10 AM PDT

      [ Parent ]

    •  oh please, inflation is not fraudulently reported (8+ / 0-)

      if it were the market would pay more than 2% on a 10-yr Treasury as inflation expectations would be factored in the pricing.

      Financial crashes like 1929 and 2008 typically foster years of deflationary forces but Ben has walked the tightrope of prices and investment activity pretty damn well so far.

      And who is the biggest beneficiary of ZIRP?  Homebuyers and the 2.2 million refis that save $4300/yr from Obma's HARP program.

      "The way to see by faith is to shut the eye of reason." - Thomas Paine

      by shrike on Sat Mar 23, 2013 at 08:30:25 AM PDT

      [ Parent ]

      •  Eliminate from the calculation (9+ / 0-)

        of the inflation rate everything the price of which tends to inflate; reduce steak to hamburger (etc.) . . . and poof! no inflation.

        The price of catamarans, on the other hand, seems to be remaining fairly constant.

        Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

        by corvo on Sat Mar 23, 2013 at 08:33:20 AM PDT

        [ Parent ]

        •  Which the BLS never did, (5+ / 0-)

          as they explained publicly. The only thing they assume is that people will substitute between different providers of the same good: If, for example, Walmart raises the price of beefsteak by 10% and, say, Costco by 5%, the methodology assumes people will shift to Costco beefsteak. In short, it assumes intra-, not inter-category substitution in a given area.

          Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

          by Dauphin on Sat Mar 23, 2013 at 08:40:39 AM PDT

          [ Parent ]

          •  A really smart calculation (2+ / 0-)
            Recommended by:
            wilderness voice, Mr Robert

            for those with the time and means to comparison-shop.

            Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

            by corvo on Sat Mar 23, 2013 at 09:10:59 AM PDT

            [ Parent ]

            •  Still, quite different from what you've written. (1+ / 0-)
              Recommended by:
              virginislandsguy

              That said, the differences are quite minor. If I remember the BLS' statement correctly, they still measure inflation using the old methodology as well, and the difference is on average something like 0.2%

              Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

              by Dauphin on Sat Mar 23, 2013 at 09:12:24 AM PDT

              [ Parent ]

          •  Corvo is correct. The BLS changed the method (6+ / 0-)

            of calculating inflation during the Clinton administration. The true inflation is hidden when people replace more expensive items with cheaper ones. If people suddenly stopped buying shoes and underwear and started eating cheap cat food the inflation rate would go down dramatically.

            Why Reported Inflation Seems Different Than Reality
            ...
            Shortly after Clinton entered the White House the Bureau of Labor Statistics (BLS) altered the calculation of inflation by changing the weighting of goods in the CPI fixed basket.  Then, over subsequent years, the method of weighting the underlying components was changed from a straight arithmetic weighting method to geometric.  The primary result of the switch to a geometric weighting was a lower weighting to CPI components that were rising in price, and a higher weighting to those items dropping in price which led to lower reported inflation.
            ...
            The obvious problem with these manipulations is it changed the measure of inflation from a cost-of-living adjustment to a reduction-of-living adjustment.  The original CPI calculation allowed individuals to understand the rate of return required on investments and incomes to maintain their current standard of living.  However, by artificially suppressing the rate of inflation, the future standard of living is reduced to lower levels.
            ...
            •  No, he isn't. Not to the extent he claims. (2+ / 0-)
              Recommended by:
              cynndara, virginislandsguy

              From the BLS' website:

              When the cost of food rises, does the CPI assume that consumers switch to less desired foods, such as substituting hamburger for steak?

              No. In January 1999, the BLS began using a geometric mean formula in the CPI that reflects the fact that consumers shift their purchases toward products that have fallen in relative price. Some critics charge that by reflecting consumer substitution the BLS is subtracting from the CPI a certain amount of inflation that consumers can "live with" by reducing their standard of living. This is incorrect: the CPI's objective is to calculate the change in the amount consumers need to spend to maintain a constant level of satisfaction.

              Specifically, in constructing the "headline" CPI-U and CPI-W, the BLS is not assuming that consumers substitute hamburgers for steak. Substitution is only assumed to occur within basic CPI index categories, such as among types of ground beef in Chicago. Hamburger and steak are in different CPI item categories, so no substitution between them is built into the CPI-U or CPI-W.

               Furthermore, the CPI doesn't implicitly assume that consumers always substitute toward the less desirable good. Within the beef steaks item category, for example, the assumption is that consumers on average would move up from flank steak to filet mignon if the price of flank steak rose by a greater amount (or fell by less) than filet mignon prices. If both types of beef steak rose in price by the same amount, the geometric mean would assume no substitution.

               In using the geometric mean the BLS is following a recognized best practice for statistical agencies. The formula is widely used by statistical agencies around the world and is recommended by, for example, the International Monetary Fund and the Statistical Office of the European Communities.

              [snip]

              Neither belief is supported by evidence. BLS calculations have shown that the geometric mean formula has reduced the annual growth rate of the CPI by less than 0.3 percentage points. Hedonic quality adjustments for shelter regularly increase the rate of change of the CPI, and those for apparel have had both upward and downward impacts at different points in time and for different types of clothing. The BLS estimates that the overall impact of hedonic quality adjustments in use in other categories has been extremely small. Furthermore, if the CPI were using the pre-1983 asset-based method instead of rental equivalence to measure homeowner shelter cost it would yield a sharply lower current measure of shelter inflation, given that house prices are now declining in many parts of the country.

              http://www.bls.gov/...

              Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

              by Dauphin on Sat Mar 23, 2013 at 09:38:20 AM PDT

              [ Parent ]

              •  The BLS site is misleading (6+ / 0-)
                Furthermore, the CPI doesn't implicitly assume that consumers always substitute toward the less desirable good. Within the beef steaks item category, for example, the assumption is that consumers on average would move up from flank steak to filet mignon if the price of flank steak rose by a greater amount (or fell by less) than filet mignon prices. If both types of beef steak rose in price by the same amount, the geometric mean would assume no substitution.
                That's nonsense. All steak is not equal. Very few steak consumers could substitute flank (or chuck) steak for filet mignon (or porterhouse) and still "maintain a constant level of satisfaction". Our family has reduced the purchase of the higher quality meats and replaced them with hamburger and sausage. Standing rib roasts are now purchased very rarely and only for very special occasions. At one time, they were a Sunday dinner regular. It's been replaced with meatloaf, not a chuck roast.
      •  So the inflation statistics (4+ / 0-)
        Recommended by:
        War on Error, jabney, k9disc, corvo

        accurately include the inflation of rents, housing prices, and so on?

        "Always in motion is the future." -Yoda

        by Cassiodorus on Sat Mar 23, 2013 at 08:37:54 AM PDT

        [ Parent ]

  •  Think about it (7+ / 0-)

    Really, how many people in the US have $160,000 in their savings accounts?

    Eat the rich!

  •  Umm, maybe I'm missing something but why (10+ / 0-)

    is this a bad idea? Isn't going after $130,000+ accounts like going after the 1%? Very few people, aside from multimillionaires and money launderers will have that much in savings accounts. And many of them put their money in Cyprus to hide it from their governments. If those are the people being affected by this why should I shed a tear?

    You can't assassinate the character of any of modern conservative. You'd have to find where it was buried, dig it up, resurrect it, then kill it. And killing a zombie isn't really assassination, is it?

    by ontheleftcoast on Sat Mar 23, 2013 at 08:23:42 AM PDT

    •  I hear you (5+ / 0-)
      Recommended by:
      shrike, Sparhawk, k9disc, Chi, Mr Robert

      But it's like letting the camel's nose into the tent.  Today its $100,000 tomorrow it's $10,000

      In the US lots of retired ppl have $$ tied up in CDs, their life's savings, so it's not just millionaires (which is middle income these days lol)

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Sat Mar 23, 2013 at 08:26:12 AM PDT

      [ Parent ]

      •  Slippery slope arguments don't play for me (8+ / 0-)

        The same arguments are used against gay marriage (next they're going to want to marry turtles!), marijuana legalization (soon they'll want heroin in school cafeterias!) and so on. The Netherlands have a wealth tax and nobody goes crazy about it. Many Islamic countries do something similar. The amount seems high at 25% but it might be the right thing to do for Cyprus. I won't dismiss it off-hand.

        You can't assassinate the character of any of modern conservative. You'd have to find where it was buried, dig it up, resurrect it, then kill it. And killing a zombie isn't really assassination, is it?

        by ontheleftcoast on Sat Mar 23, 2013 at 08:32:26 AM PDT

        [ Parent ]

        •  The man on turtle argument is not a slippery slope (0+ / 0-)

          it's more 'inflatio' ad absurdum. It inflates the potential damage of the movement to the absurd - it takes the slippery slope argument to an entirely different mountain from which it will slide down to some absurd, imaginary place.

          It is even hard to call it a logical fallacy, as it's not depending on or appealing to logic whatsoever.

          Slippery slope arguments are extremely weak when 'switching mountains in hyperbolic illogic appeals, and they should be ridiculed.

          But the nature of a slippery slope when it comes to the pursuit of profit and power are more of a law of entropy kind of thing. The slope is constant - it's not moving to another mountain to change a decimal place in an economic slippery slope.

          It might be invalid, it might be impossible because of legislative and/or regulatory checks and balances and the very idea of self governance, but all of those principles are getting skewed toward corporate and the Establishment or perhaps to the Corporate Establishment.

          It's hard not to see the validity of the argument given when you can clearly see the current slant of the playing field.

          Democracy - 1 person 1 vote. Free Markets - More dollars more power.

          by k9disc on Sat Mar 23, 2013 at 10:37:07 AM PDT

          [ Parent ]

          •  And a swing and a miss! (0+ / 0-)

            I was using the extreme arguments as a point of mockery. With gay marriage the next "line in the sand" is polygamy. With marijuana it's other drugs like cocaine and heroin though not served in school cafeterias.

            You can't assassinate the character of any of modern conservative. You'd have to find where it was buried, dig it up, resurrect it, then kill it. And killing a zombie isn't really assassination, is it?

            by ontheleftcoast on Sat Mar 23, 2013 at 10:41:06 AM PDT

            [ Parent ]

            •  That's fine and all, but the slopes are not really (0+ / 0-)

              the same in those instances.

              Pot use and cocaine use are totally different critters and bring present different situations - essentially the slope is ported to another mountain - a bigger, more dangerous mountain.

              Polygamy as well. "What's next, GASP!, 30 wives? That's a different slope, IMO, as well.

              $100,000 to $10,000 is the same slope. It's unused, parked money - it's a drag on the economy.

              A strong fairness/shared sacrifice argument with the current slope of the playing field, ending with poor people getting the shaft is kind of a logical path at this point in time, IMO.

              Peace~

              Democracy - 1 person 1 vote. Free Markets - More dollars more power.

              by k9disc on Sat Mar 23, 2013 at 11:05:26 AM PDT

              [ Parent ]

              •  So you wouldn't put a tax on accounts (0+ / 0-)

                of a $1,000,000? How about $10,000,000? Because that's just higher on the same slope. All assets hoarded by the rich are untouchable by your argument. Sorry, I'm not buying that either.

                You can't assassinate the character of any of modern conservative. You'd have to find where it was buried, dig it up, resurrect it, then kill it. And killing a zombie isn't really assassination, is it?

                by ontheleftcoast on Sat Mar 23, 2013 at 11:31:09 AM PDT

                [ Parent ]

      •  Don't you mean the horse out of the (2+ / 0-)
        Recommended by:
        War on Error, OldSoldier99

        barn? There are no camels native to Cyprus.

      •  In the US, the first $250,000 is insured (5+ / 0-)

        through FDIC. If the bank fails, you would be legally entitled to your insured $250,000 but could lose anything in your account above that amount.
        Historically, govt has stopped depositors from losing money in bank failures, but the $250,000 is all that's guaranteed.
          BTW, many CDs are NOT insured.

        •  but the point is that they (0+ / 0-)

          were proposing abrogating on that insurance.

        •  What?!!! Some CDs aren't FDIC insured? (1+ / 0-)
          Recommended by:
          BlueDragon

          It's difficult to be happy knowing so many suffer. We must unite.

          by War on Error on Sat Mar 23, 2013 at 09:29:03 AM PDT

          [ Parent ]

        •  That's why the bulk of my retirement savings (2+ / 0-)
          Recommended by:
          BlueDragon, ferg

          are in Federal securities -- there's no way in hell I'd risk any of my savings with Wall Street or a bank.

          My spending money is in a credit union. I'm looking at moving our mortgage there.

          Check where Greenspan keeps HIS money sometime...

          •  Just so you know, all but the very largest (1+ / 0-)
            Recommended by:
            nchristine

            Credit unions sell their mortgages to big banks. Actually, even large credit unions do too.

            When your rate gets locked, it's usually then that they have an agreement from a big bank to buy your mortgage.

            We've refi'd 3 times with2 different CU's. we keep ending up with the same bank. They're overall friendly and efficient to work with, so I guess it's all right. But it's kind of become amusing. Even a mortgage we took out with a large national financial company (we specifically avoided TBTF banks) was just sold to a TBTF bank when they announced they're getting out of the mortgage business. So we have 2 loans with 2 TBTF banks despite all our best efforts to avoid them.

            So don't refi just to move your business unless they promise they don't sell mortgages. And even then, they might. Your escrow papers will almost certainly have a document saying they can. Don't sign it, you don't get your loan.

            © grover


            So if you get hit by a bus tonight, would you be satisfied with how you spent today, your last day on earth? Live like tomorrow is never guaranteed, because it's not. -- Me.

            by grover on Sat Mar 23, 2013 at 01:38:49 PM PDT

            [ Parent ]

      •  It would be interesting to see the data. (1+ / 0-)
        Recommended by:
        War on Error

        If wealth disparity reflects deposits, just levying the top 1% might be sufficient . . . . just sayin'.

        "To recognize error, to cut losses, to alter course, is the most repugnant option in government." Historian Barbara Tuchman

        by Publius2008 on Sat Mar 23, 2013 at 09:23:24 AM PDT

        [ Parent ]

      •  They have no other option (1+ / 0-)
        Recommended by:
        virginislandsguy

        Is this or the total absolute chaos of being out of the Euro. Why have the European taxpayers have to bailout banks that have dedicated themselves to poke a finger in Europe's banking regulations and become a tax heaven for the Russian plutocrats?

        The savings up to 100,000 are guarantied the rest is take or sink

    •  130k in savings is NOT the 1%, my friend (14+ / 0-)

      Howard Fineman needs to have a chat with Chris Cilizza about Grecian Formula and its effects on punditry

      by memofromturner on Sat Mar 23, 2013 at 08:30:35 AM PDT

      [ Parent ]

      •  True, (2+ / 0-)
        Recommended by:
        BlueDragon, Iberian

        but it's not the 90%, either. There should be a graduated scale (see my comment below), beginning "Frankly, that approach is..."

        Mindfulness is the first necessity of sanity and survival and the first casualty of Consumer Culture.

        by Words In Action on Sat Mar 23, 2013 at 08:38:05 AM PDT

        [ Parent ]

      •  How about some numbers to back that up (5+ / 0-)
        Recommended by:
        BlueDragon, nancyjones, ferg, Iberian, cynndara
        Average American family savings account balance   $3,800
        Percent of working Americans who are not saving for retirement 40 %
        Percent of American families who have no savings at all 25 %
        Average amount saved for retirement $35,000
        Average American household debt $117,951
        Average American family home value $160,000
        Average amount owed on home mortgage $95,000
        Average American household annual income $43,000
        Average credit card debt $2,200
        Percent of American workers who postponed their retirement age this year 24 %
        Percent surveyed who are very confident about having enough money for retirement 18 %
        Percent of American adults who do not have a bank account 7.7 %
        Percent of American adults who have an emergency fund to fall back on 38 %
        Take those numbers and do some simple calculations. Only 75% of Americans have any savings and they average less than $4,000. Using the standard curve of wealth distribution to get 34X's that amount then I'm sorry but $130,000 in savings (not retirement accounts) is definitely the land of the 1%.

        You can't assassinate the character of any of modern conservative. You'd have to find where it was buried, dig it up, resurrect it, then kill it. And killing a zombie isn't really assassination, is it?

        by ontheleftcoast on Sat Mar 23, 2013 at 08:40:42 AM PDT

        [ Parent ]

        •  So it doesn't matter how the $130k got there or (4+ / 0-)
          Recommended by:
          nchristine, Sparhawk, OldSoldier99, grover

          how long it took to get there? Seems we've been duped by the real rich again and are pitted against one another.

          I see what you did there.

          by GoGoGoEverton on Sat Mar 23, 2013 at 08:41:55 AM PDT

          [ Parent ]

          •  I agree with the approach the diarist made (0+ / 0-)

            elsewhere. Graduated rates that go after the megarich would be a much better solution. But I have a hard time accepting, based on real data, that this would have a dramatic impact. At least in the US.

            You can't assassinate the character of any of modern conservative. You'd have to find where it was buried, dig it up, resurrect it, then kill it. And killing a zombie isn't really assassination, is it?

            by ontheleftcoast on Sat Mar 23, 2013 at 08:47:24 AM PDT

            [ Parent ]

            •  It'd be worse in the US. (0+ / 0-)

              That $130k might be all someone has, save some measly SS or SSDI. Much easier to take the hit when you have healthcare and housing covered.

              I see what you did there.

              by GoGoGoEverton on Sat Mar 23, 2013 at 08:49:47 AM PDT

              [ Parent ]

            •  Try this reality: People would stop saving... (0+ / 0-)

              Why save money over decades when assholes in power are just going to come take it all?

              If anything, your approach will push people to invest in foreign safe havens...something that would be disastrous for this country when lending dries up and the auto/retail industries along with it. That or they will just go all Glenn Beck and buy a shitload of gold and silver, which does SQUAT for the economy.

              Adequate health care should be a LEGAL RIGHT in the U.S without begging or bankruptcy. Until it is, we should not dare call our society civilized.

              by Love Me Slender on Sat Mar 23, 2013 at 03:44:54 PM PDT

              [ Parent ]

        •  No it most certainly is not (2+ / 0-)
          Recommended by:
          middleagedhousewife, k9disc

          And "the 1%" is just fucking shorthand, not math. The problem is more in the top 10% of the top 1% of the top 1%.

          The goal is to pull more people up to a reasonable retirement situation not less. And in America $100k is near the borderline for reasonable retirement situation.

          •  It isn't really even the numbers of that .01%... (2+ / 0-)
            Recommended by:
            BlueDragon, cynndara

            It's the bad actors that are in that neighborhood and the collective bad action of rent seeking parasites that have grown too big for the host.

            I'm far more concerned with the actions of EXXON and Big Oil as a cartel than I am of some big oil baron in Houston.

            Just like I'm more concerned with Goldman Sachs than I am of Warren Buffet.

            I'm really only against the super wealthy when they leverage their wealth against humanity.

            It's easy to mix that up with "rage at rich people", which I think that the post you responded tried to tut tut.

            A hundred grand is still a heartbeat away from bankruptcy today, and is in no way shape or form a 1% kind of holding.

            Reminds me of Chris Rock on "Rich vs Wealth" - "Shaquille O'neal is rich. The guy who signs his check? He's wealthy..."

            Democracy - 1 person 1 vote. Free Markets - More dollars more power.

            by k9disc on Sat Mar 23, 2013 at 10:24:00 AM PDT

            [ Parent ]

      •  not here perhaps... but Cyprus? (3+ / 0-)
        Recommended by:
        War on Error, ferg, virginislandsguy

        It very well could be the 1% there. I'm pretty sure it would be in Romania, for example. It also would hit foreigners who keep their money in Cyprus to avoid higher taxes at home.  

        A learning experience is one of those things that says, 'You know that thing you just did? Don't do that.' Douglas Adams

        by dougymi on Sat Mar 23, 2013 at 09:29:13 AM PDT

        [ Parent ]

      •  I'd Bet That When It Comes To Liquid Cash In (2+ / 0-)
        Recommended by:
        ferg, virginislandsguy

        a bank account,  $130k is easily top 1%.

    •  Two reasons: (4+ / 0-)

      Firstly, a large percentage of deposits in Cyprus are both foreign and large. If they look like they will be expropriated - and there is no guarantee this will be the only levy on deposits - a bank run could result.

      More generally, banks have always been very vulnerable to bank runs, which occurred when there was even a slight whiff of risks that the banks would be unable to meet their obligations to depositors. The whole deposit insurance system was set up to avoid precisely that. The precedent this levy sets pretty much tears up all the deposit guarantees (since they only come into play in cases of bankruptcy, not bailouts), and make a bank run more likely.

      Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

      by Dauphin on Sat Mar 23, 2013 at 08:48:10 AM PDT

      [ Parent ]

      •  From what I've seen the Cyprus legislature (1+ / 0-)
        Recommended by:
        virginislandsguy

        is also considering moves to limit the possibility of bank runs. They've closed the bank until at least Thursday and are ready to put limits on withdrawls, etc. to prevent runs. I'm not a huge fan of this approach, but I'm also not seeing the reasons for the outrage either. Of course those are the opinions of one person (and maybe a dumb one) on a Saturday morning.

        You can't assassinate the character of any of modern conservative. You'd have to find where it was buried, dig it up, resurrect it, then kill it. And killing a zombie isn't really assassination, is it?

        by ontheleftcoast on Sat Mar 23, 2013 at 08:56:08 AM PDT

        [ Parent ]

        •  The problem is longer-term. (4+ / 0-)

          Sure, capital restrictions might prevent a full-scale capital flight now, but no one is going to trust Cypriot banks for the foreseeable future, and capital restrictions will have to be lifted eventually, since harsh restrictions are (i) economically clunky and unwieldy, and (ii) may only be an emergency measure under EU law. So the problem is likely only delayed.

          Secondly, and here is where my legalistic heart comes in, the reason for the levy is that no one wants to be seen as bailing out Russian money launderers. But I haven't seen a single estimate of how much of Russian capital is in Cyprus for the purposes of money laundering. More importantly, I think it is unacceptable to effectively presume that every large depositor in Cyprus is a money launderer. That's a criminal offence, and if we are serious about combatting money laundering, the right approach would be a full audit of the banks and their accounts...

          Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

          by Dauphin on Sat Mar 23, 2013 at 09:00:54 AM PDT

          [ Parent ]

          •  You don't have to assume the wealthy are (1+ / 0-)
            Recommended by:
            BlueDragon

            criminals, but you can ask them to pay for an economic disaster they've been insulated from for the past several years. As for trust in the Cyprus banking sector I say, "What trust? Aren't the banks what created this disaster in the first place?" Ask Icelanders if they trust their banks. Hell, ask an American.

            You can't assassinate the character of any of modern conservative. You'd have to find where it was buried, dig it up, resurrect it, then kill it. And killing a zombie isn't really assassination, is it?

            by ontheleftcoast on Sat Mar 23, 2013 at 09:06:11 AM PDT

            [ Parent ]

          •  Actually such an audit is currently underway (2+ / 0-)
            Recommended by:
            ferg, nchristine

            The European anti-money laundering (AML) regional body (MONEYVAL) is conducting an AML audit of the Cypriot banks as we speak.   While there are some legitimate questions about whether the audit could have been conducted better, this does at least represent a more "reality-based" approach to the problem.

            It is a highly technical operation, of course, and as such is unlikely to replace the haircut on large uninsured deposits that is at the heart of the policy package.  The haircut has the political advantage of seeming to address the perceptions of the German taxpayer that you refer to ("bailing out Russian money launderers") and the economic advantage of having a better chance of producing 5.8 billion euros NOW.   Even if you COULD confiscate 100% of all funds that are correctly identified as being the proceeds of crime (and just thinking about how one would go about doing that should indicate the daunting nature of the task facing MONEYVAL), it would take too long and it might well fall short of 5.8 billion.  

            So, while I agree that directly attacking the money-laundering problem would be a more logical and defensible approach, I think it will always remain a parallel track to the haircut.

      •  The deposit guarantee is only on the first 100k. (0+ / 0-)
    •  Are you joking (3+ / 0-)
      Recommended by:
      OldSoldier99, Chi, Mr Robert

      Lots of people in the US have $130k in savings.

      I personally know people in their early 30s with that kind of savings, and they are in upper income brackets but in no way are 'rich' or anything close. These are people with bachelor/masters degrees in technical matters; they go to work every day and sometimes get laid off like anyone else, etc.

      Having $100k in the bank isn't some rich dream. For example, you just need to make $60k/year and save $10k of it every year. Not the 1% by any means.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sat Mar 23, 2013 at 09:21:50 AM PDT

      [ Parent ]

      •  Who's talking about the US? (1+ / 0-)
        Recommended by:
        ferg

        Did I miss something?

        A learning experience is one of those things that says, 'You know that thing you just did? Don't do that.' Douglas Adams

        by dougymi on Sat Mar 23, 2013 at 09:31:16 AM PDT

        [ Parent ]

      •  savings in the bank? (0+ / 0-)

        Really? Not invested anywhere, but sitting in a bank account?

        •  These days? (1+ / 0-)
          Recommended by:
          War on Error

          I know that a lot of my own savings are sitting in a plain old bank account rather than invested somewhere (which over the last few years has been a bad idea, but hey).

          Better to make 1% interest than take a 30% hit, and I don't even know what is a good investment these days? Metals? Foreign bonds? Municipal debt? Stocks? All of them look like not a great investment.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sat Mar 23, 2013 at 09:49:02 AM PDT

          [ Parent ]

      •  Numerically, It Might Seem Like a Lot (1+ / 0-)
        Recommended by:
        BlueDragon

        But as a percentage of the total population, the number of people who have a savings account in a single bank with a balance greater than $130,000 is very small.

        For example, the median net worth of families with a head of household between 35 and 44 was about $40,000 in 2010:

        http://www.joshuakennon.com/...

        Your example is more than triple the median net worth for the age group, and excludes categories of worth like real estate and equities.

        I would guess that your sample size is pretty small, compared to the whole.

        "I'll believe that corporations are people when I see Rick Perry execute one."

        by bink on Sat Mar 23, 2013 at 10:07:44 AM PDT

        [ Parent ]

        •  Meh (2+ / 0-)
          Recommended by:
          BlueDragon, Sparhawk

          Anyway, confiscating deposits is a really, really, really bad thing, regardless of the deposit size.

          If Cyprus does this, even for high-value accounts, they will destroy their banking system. People will -- as they should and must -- withdraw as much money as they can from these institutions and keep it elsewhere. Foreign depositors will vanish as soon as they are able.

          Deposits are always senior to any other kind of debt that a bank has. If that does not hold true, your institution will collapse.

          "I'll believe that corporations are people when I see Rick Perry execute one."

          by bink on Sat Mar 23, 2013 at 10:31:12 AM PDT

          [ Parent ]

        •  Like I said (0+ / 0-)

          All you need to do is save $10k/year for 10 years.

          It's not impossible even if you are medium income, especially in a two-income household that totals over $100k/year (I.e. lots of people).

          It helps to choose to delay kids and not live in a suburban house.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sat Mar 23, 2013 at 10:40:49 AM PDT

          [ Parent ]

    •  My mother is 77 years old. (3+ / 0-)
      Recommended by:
      War on Error, BlueDragon, Mr Robert

      She gets just over $1,000 a month in Social Security, with no other income. Zero.  

      We recently sold her house (after going into debt ourselves to fix it up) so she could move into a "senior community." The profit on the sale was $130k, which is her entire net worth. My mother's life is tied up in that money, and you won't shed a tear if somebody were to take it from her? Friend, I find that pretty despicable.

      "The President is trying to make it tough on members of Congress. It's just sick." -- John Boehner (R-WATB)

      by OldSoldier99 on Sat Mar 23, 2013 at 09:41:47 AM PDT

      [ Parent ]

      •  How many years will that money cover (4+ / 0-)

        costs of senior center?

        I think it sucks that retired ppl have to sell their homes and then pay exorbitant fees for mediocre living conditions.

        Most are grossly understaffed, at least here in Utah.  My friend works for one of the better ones and it horribly understaffed, with CNAs passing out meds for $4,000 a month!!

        It's difficult to be happy knowing so many suffer. We must unite.

        by War on Error on Sat Mar 23, 2013 at 09:55:58 AM PDT

        [ Parent ]

      •  If she had her money in a Cypriotic bank (0+ / 0-)

        She wouldn't lose a penny with the current proposal.  Even if she had 120,000 euro, $156k, she'd only lose 5,000 euro and still have 115,000 euro.

        It would only be people with well over 100k euro in Cypriotic banks who would see a significant tax levied.

        "It was believed afterward that the man was a lunatic, because there was no sense in what he said." "The War Prayer" by Mark Twain

        by Quanta on Sat Mar 23, 2013 at 11:23:00 AM PDT

        [ Parent ]

    •  If I were ever somehow (1+ / 0-)
      Recommended by:
      BlueDragon

      to have $130K in a bank account, I'm sure that I'd be happy to give some of it away to ensure that my society didn't crumble. I would, however, be a little unhappy that 25% of it would be expropriated. That sounds just a little excessive, even if this meant that, suddenly, I was part of the 1%.

    •  1%ers put their money in places (0+ / 0-)

      Other than savings accounts -- like stocks, bonds, real estate.

      They can afford to take a loss. Folks who stick money in savings accounts are generally risk averse and don't have security that can guard hoards of cash and gold at home. In other words, the lower upper class and middle class.

      These are the people who work for their money and spend much of their money. You hurt them, you hurt the domestic (and global) economy.

      © grover


      So if you get hit by a bus tonight, would you be satisfied with how you spent today, your last day on earth? Live like tomorrow is never guaranteed, because it's not. -- Me.

      by grover on Sat Mar 23, 2013 at 01:27:41 PM PDT

      [ Parent ]

    •  If you had saved for decades to use that money... (0+ / 0-)

      ...later in life, after your max earning age had expired, you might feel differently about this. You seem to be looking at this through the lens of someone wanting to screw the rich.

      Problem is, $130,000 in the bank isn't "rich" for some people...it's what they live on.

      Adequate health care should be a LEGAL RIGHT in the U.S without begging or bankruptcy. Until it is, we should not dare call our society civilized.

      by Love Me Slender on Sat Mar 23, 2013 at 03:41:38 PM PDT

      [ Parent ]

  •  Riots by people who have over 100k in their (3+ / 0-)

    accounts? Unlikely.

  •  Do people with $130,000 in even one bank (5+ / 0-)

    riot in the street?  Also few people living in Cyprus have bank accounts this large.

    The bigger issue for Cyprus, with its oversized banking sector, how do they replace this part of their economy as it shrinks?

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Sat Mar 23, 2013 at 08:28:23 AM PDT

  •  A Brooks Bro riot? I agree this is (1+ / 0-)
    Recommended by:
    War on Error

    a terrible way to settle debt, but better than robbing pensions and govt, which was the second plan offered after the first "haircut" was announced.

    Was it ever verified that govt higher up took over $4 billion euros out of the country just prior to these announcements?

    Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree. -Martin Luther

    by the fan man on Sat Mar 23, 2013 at 08:29:23 AM PDT

  •  It's to keep Cypriots from going postal (4+ / 0-)

    at the expense of foreigners (mostly Russian and Eastern European) who use Cyprus like Americans use the Caymans.

    Plan C would be to first freeze and then confiscate all foreign assets and let the chips.

    And that might happen too.

    •  Right. (0+ / 0-)

      Which is pretty much what's happened.  Capital controls, banks closed, pass the confiscation laws, and when the banks open again, the 25% has been expropriated.  And probably whatever's left, can only be withdrawn gradually over an extended period of time.

  •  Frankly, that approach is (11+ / 0-)

    better than draconian austerity for those who don't have 100,000 euros stashed away.

    Actually, I would rather see something like

    10% of 100-249K
    20% of 250-499K
    25% of 500-999K
    33% of 1M-9.99M
    40% of 10M-24.99M
    50% of 25-99.9M
    60% of 100+M

    and there will have to be either protections or penalties against flight of capital...

    1) Someone's got to pay for it
    2) Creditors shouldn't be forced to take it all in debt
    3) Cyprus should pay a good chunk off now
    4) The wealthiest should pay most, because they are no doubt most culpable.

    At the same time, the creditors should take a haircut on the debt owed them. In particular, the wealthiest people within the nations holding Cypriot debt.

    Basically, the lion's share should be paid for by the banksters and other plutocrats who engineered this mess.

    Mindfulness is the first necessity of sanity and survival and the first casualty of Consumer Culture.

    by Words In Action on Sat Mar 23, 2013 at 08:36:20 AM PDT

    •  We tend to think these gamers/bankers are (4+ / 0-)
      Recommended by:
      BlueDragon, Spron, DrTerwilliker, cynndara

      smarter than the rest of us, but maybe not.  (If Lloyd Blankfein is smarter than the rest of us, it's certainly not one of his most obvious features.)

      Building a better America with activism, cooperation, ingenuity and snacks.

      by judyms9 on Sat Mar 23, 2013 at 08:42:33 AM PDT

      [ Parent ]

    •  The correct solution (1+ / 0-)
      Recommended by:
      War on Error

      Is not getting into these types of situations to begin with and unelect everyone everywhere who advocates more debt without a specific payoff plan.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sat Mar 23, 2013 at 09:38:16 AM PDT

      [ Parent ]

      •  As I recall, Goldman Sachs helped Greece tank (4+ / 0-)

        How the Monsters at Goldman Sachs Caused a Greek Tragedy

        Greece's crushing debt has exploded into a full-blown crisis, with the country on the precipice of the unthinkable: the default of a sovereign nation. Thanks Goldman Sachs.
        Not that other factors didn't exist; however, GS gets the $$ and no liability.  What a racket.

        It's difficult to be happy knowing so many suffer. We must unite.

        by War on Error on Sat Mar 23, 2013 at 09:50:59 AM PDT

        [ Parent ]

      •  time travel: the perfect solution (1+ / 0-)
        Recommended by:
        BlueDragon
        •  Yup (0+ / 0-)

          The proper 'solution' to a car crash is not to crash it in the first place.

          After the crash it cannot be fixed.

          Just like with national economies. Once you allow an asset or debt bubble, you are screwed, regardless of what methods you use to fight the aftermath.

          Lots of people think that the Fed's policies in the aftermath of the crash of '29 caused the Depression (progressives often think this). They are wrong. The Depression was baked in as soon as the asset bubbles of the '20s were allowed to form.

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sat Mar 23, 2013 at 10:27:03 AM PDT

          [ Parent ]

          •  Earlier. (0+ / 0-)

            The Depression was a late reaction to the bills coming due for WWI.  The asset bubbles, such as they were, were a result of credit being extended for all of the deferred consumption and maintenance that had occurred while Europe spent four years trashing its entire population and infrastructure.  But there was little production to back it up, because first everyone in Europe borrowed multiple times their GDP to fight the war, and then they had no productive capacity left, so they had to borrow to rebuild capacity.  Then the bills all came due when they finally admitted that Germany was never going to be able to pay for everything by itself via reparations.

            And since Wall Street had provided all the loans, and built up a nice fat asset bubble on the principle that all those loans were actually going to be repaid, the US also crashed.  But don't overlook that the postwar "asset bubble" really started with an entire continent fighting a war that NO ONE could afford, not even the bankers who provided the loans.

      •  That (2+ / 0-)
        Recommended by:
        ferg, Theston

        means control over the Cypriot banks that accepted over 40 billion in foreign deposits and then invested it in risky deals in Greece. Now those banks have put the whole country in peril. There is other option the banks go under and then the deposits are gone. Not 20% shave or anything, just anything over 100,000 gone

  •  The Cayman Island of the Med. I'm guessing a lot (3+ / 0-)
    Recommended by:
    marina, ferg, HamdenRice

    of "residents" who have this amount in account are NOT Cyprians.

    Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree. -Martin Luther

    by the fan man on Sat Mar 23, 2013 at 08:46:05 AM PDT

  •  Uh, if Cyprus's banks go bankrupt (2+ / 0-)
    Recommended by:
    ferg, Iberian

    everything above 100k is lost. And no, it's not "to serve the deficit", it's to bail out the banks.

  •  i am feeling this crisis as (2+ / 0-)
    Recommended by:
    War on Error, cynndara

    critical to our global situation.  am i wrong?

    i feel somewhat better about this formula than the earlier one, but the entire situation is beyond belief.

    i never supported capitalism, but how can any rational person support a system that takes us in this direction?

    •  it's not necessarily critical (0+ / 0-)

      Cyprus has crooked banks for crooked foreigners. It's like the Caymans for rich Europeans and Russian crooks.

      The new plan cuts that crooked money to protect the small savers.

    •  I agree. (1+ / 0-)
      Recommended by:
      War on Error

      Not just because of the economic consequences, which could be serious, but because it adds in geopolitical issues as well.  You have the undeveloped oil/gas resources offshore, the Russian interest in those resources, and now, you have stiffing a significant group of wealthy/powerful Russian individuals at the obvious behest of the Germans.

      And you have a Muslim nation immediately to the north which has been rejected for membership in the EU and therefore has some resentment towards the EU, which previously invaded Cyprus, continues to hold some territory on the island fait accompli, and also has a border with Russia.  Turkey could swing either way.  It was courted by the Americans throughout the Cold War and pulled into the NATO alliance as a buffer against Russia.  But with France rebuffing its play to become part of the EU, it could swing towards Russia or even Iran.  Turkey and Germany spent four centuries at war during the Ottoman period.  Russia and Germany, well, that's RECENT history.  Germany also has a history of, shall we say, arrogance in international affairs?  

      By setting aside socialism as an ideology, Russia bought off the hostility of Britain and the US, which had always been mostly about (shades@!) Lenin's stiffing them for loan repayments after WWI and fears about  "International Communism" lending support to rebellions by their own suppressed peasantry.  Now we're back to pure geopolitical gamesmanship, in a world of declining raw resources and increased population pressure.  I'm afraid this could be one of the small steps ratcheting up something that will eventually prove nasty.

  •  I agree it's not the right solution (1+ / 0-)
    Recommended by:
    War on Error

    But are you really against all wealth taxes?

    Like the wealth tax in France, or property taxes in the United States?

    We were not ahead of our time, we led the way to our time.

    by i understand on Sat Mar 23, 2013 at 09:11:04 AM PDT

    •  I believe in the tax system that was in place (5+ / 0-)

      from the end of WWII until Reagan.

      It was a truly progressive tax, many tiered.

      I'm not sure if the tax havens were as readily available back then, but the high tax on high income did not impede a healthy economy.  On the contrary, those were the US golden years for the now eviscerated middle class.

      I do take issue with changing the rules with little warning.

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Sat Mar 23, 2013 at 09:17:10 AM PDT

      [ Parent ]

    •  this is NOT a tax (3+ / 0-)
      Recommended by:
      War on Error, OldSoldier99, Mr Robert

      it is a confiscation.

      •  Do you think property taxes are confiscation? (0+ / 0-)

        We were not ahead of our time, we led the way to our time.

        by i understand on Sat Mar 23, 2013 at 09:33:37 AM PDT

        [ Parent ]

        •  no, but this has nothing (1+ / 0-)
          Recommended by:
          OldSoldier99

          to do with property taxes

          what is your point?

          •  This is a property tax (1+ / 0-)
            Recommended by:
            marsanges

            When the government says you have to pay them a portion of your assets (as is happening in this case), it's a property tax.

            We were not ahead of our time, we led the way to our time.

            by i understand on Sat Mar 23, 2013 at 09:45:56 AM PDT

            [ Parent ]

            •  for one thing (0+ / 0-)

              taxes are announced previous to their enactment, so individual's have a chance to opt out of said system by moving or changing their financial arrangements.

              the banks were closed without notice; these proposals are being invented during the bank closures.

              i've no sympathy for the russian oligarchs, but i am sure all this is catching a lot of innocent cypriots in this wave.

              and the whole thing is being caused by malfeasance on the part of a few people who made decisions while insulated from their effects on their persons.

              if this is a 'tax,' it is certainly taxation without representation.

              •  What? (0+ / 0-)

                This is being enacted by duly elected representatives right? That's not taxation without representation.

                As I said, I don't think this is the right solution but you don't need to go further and twist it into something it's not.

                We were not ahead of our time, we led the way to our time.

                by i understand on Sat Mar 23, 2013 at 09:59:19 AM PDT

                [ Parent ]

      •  Expropriation is the term (2+ / 0-)
        Recommended by:
        BlueDragon, cynndara

        ex·pro·pri·ate  (k-sprpr-t)
        tr.v. ex·pro·pri·at·ed, ex·pro·pri·at·ing, ex·pro·pri·ates

        1. To deprive of possession: expropriated the property owners who lived in the path of the new highway.

        2. To transfer (another's property) to oneself.

        But confiscated works for me, too.  What nerve, verve, and courage the Merkel group have.

        It's difficult to be happy knowing so many suffer. We must unite.

        by War on Error on Sat Mar 23, 2013 at 09:45:07 AM PDT

        [ Parent ]

    •  How you tax (0+ / 0-)

      foreign saving deposits?

      Of course the right answer is not letting a huge amount of not investment foreign money into your banks, or to forbid the banks to never have enough $$ to cover the billions and billions they have in deposits.

  •  There is a guarantee (similar to our FDIC) that (9+ / 0-)

    the Cypriot govt will insure savings deposits under 100,000 Euros. Amounts above 100,000 Euros have no such guarantee. So, the big depositors would lose 25% of their holdings above the insured amount. If the bank were to fail, they would lose their entire uninsured deposit.
       Oddly, the entire Cyprus problem stems from one bank failure, which will lead to penalizing big depositors in all their banks.
       In a fair world, that bank would have been allowed to fail and the small depositors would have been insured, rather than involving the whole Cypriot political and banking system.
       

    •  meh (1+ / 0-)
      Recommended by:
      middleagedhousewife

      What wealthy people in the US do is just open accounts at multiple banks to keep each account below the threshold.

      Don't know if people do that in Cyprus or if it would work in this case to avoid the tax.

      We were not ahead of our time, we led the way to our time.

      by i understand on Sat Mar 23, 2013 at 09:13:05 AM PDT

      [ Parent ]

    •  but they were proposing (0+ / 0-)

      to abrogate that insurance; this is the alternative proposal.

      •  so then what is wrong w/ it? (2+ / 0-)
        Recommended by:
        ferg, Theston

        if the insurance limit (100K) is respected then this here is par for the course.

        I understood the outrage when the Cyprus govt wanted to extend the levy down to the smallest deposits.

        Now, not. There is a bankrupty (that of Cyprus and its banks). All givers of capital in it - above an established lower offcut - are asked to carry a share of the losses.

        It isnt hitting poor people (noone with > 100K in a bank account is poor in my book), it hits exactly those (tax evasion capital) who people on DKos usually want to be hit. So now it is again not right? Who should have taken the losses then, according to those who are outraged? European public (taxpayer) money, to protect international tax evasion capital? That is in fact outrageous and I am pleased that for once, the EU has insisted that not just taxpayers, but actual capitalists get hit.

  •  A backgrounder on Cyprian debt (5+ / 0-)
    Cyprus Should Let the Banks Go Bankrupt

    COSTAS LAPAVITSAS, PROF. ECONOMICS, UNIV. OF LONDON: In part. Basically, Cyprus has followed a development path that was unsustainable and quite simply mad. It's gone for becoming an international financial center, which in the context of Cyprus has meant attracting deposits from across the world, and very few questions asked. And therefore some of these deposits are of very shady provenance. So Cyprus has done all that. And on the basis of this collecting of money, the banks in Cyprus have become simply enormous relative to the economy. The banks have invested heavily in Greece and elsewhere, and they've engaged in property lending on the island, which has created a local bubble of quite some size. That's the banking side.

    The real economy, meanwhile, in Cyprus has gone from bad to worse. It's been losing competitiveness within the euro, and it's not been functioning very well at all, creating huge deficits, generally inability to compete internationally. [crosstalk]

    JAY: Okay. Let me just ask one question. So why--apparently the Russian billionaires have a third to half of the deposits in the Cypriot banks, according to the BBC. I mean, why are they parking their money there? 'Cause it gets them inside the EU?

    LAPAVITSAS: Very low tax. No questions asked. So it's essentially, you know, the place where operators--you know, is a center for legalizing money or moving money away from the eyes of the authorities elsewhere.


    More at The Real News
    •  please watch this!!!!!! (2+ / 0-)
      Recommended by:
      Claudius Bombarnac, War on Error

      the economist recommends going the iceland route and declares the imf and EU powers that be are doing something absurd here.

      they will destroy the economy; they are treating cyprus as if it is insignificant.

      and it will force privatization on cyprus.

      the fact that kossacks don't understand this situation disturbs me.

      my finance background is minimal, but i can see this is dangerous in the extreme.

  •  Lawmakers also voted to nationalize pensions... (4+ / 0-)

    Racing to placate its European partners,

    ...Cypriot lawmakers voted in late-night session on Friday to nationalize state pensions and split failing lenders into good and bad banks...
    Hopefully, the nationalizing of pensions won't be acceptable, even to the EU:
    ...The plan to nationalize semi-state pension funds has, however, met with resistance, particularly from Germany which made clear that tapping pensions could be even more painful for ordinary Cypriots than a deposit levy....

    No matter what happens, though, it's not a good time to be an average citizen in Cyprus, with everything from money to food being in short supply:  

    Retailers, facing cash-on-delivery demands from suppliers, warned stocks were running low.

    "...At the moment, supplies will last another two or three days," said Adamos Hadijadamou, head of Cyprus's Association of Supermarkets. "We'll have a problem if this is not resolved by next week..."

    •  Great additions, thanks (3+ / 0-)
      Recommended by:
      BlueDragon, OldSoldier99, kurious

      The ripple effect of implementing this policy greatly concerns me for Cypriots as well as the world at large.  If the levy happens, confidence in banking can be negatively affected.

      Which is why so many in the US have moved to local credit unions with a good history/reputation.

      Although, I found out that the State forced my credit union to absorb a failed bank.  What's with that?

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Sat Mar 23, 2013 at 09:22:25 AM PDT

      [ Parent ]

      •  it seems anything (2+ / 0-)
        Recommended by:
        War on Error, kurious

        can happen at any time.

        capitalism doesn't fail; only individuals fail.

        hence our savings and investments can be taken from us at any time.

        and we do nothing.

        how is it that we do nothing?

        are the vast majority of humans that conformist?  that afraid?

        we are all sitting around absorbing the hits as if all this were our fault.

        •  Well, I think the occupy movement stood up (2+ / 0-)
          Recommended by:
          BlueDragon, cynndara

          but I faintly remember hearing, years ago, that dailykos community was disuaded from street protesting.  I could be wrong, aging and all that.

          It's difficult to be happy knowing so many suffer. We must unite.

          by War on Error on Sat Mar 23, 2013 at 09:34:40 AM PDT

          [ Parent ]

          •  wow (2+ / 0-)
            Recommended by:
            War on Error, OldSoldier99

            no comment as to the policy

            and yes

            occupy was a ray of light

            •  And we saw what happened to those brave souls (1+ / 0-)
              Recommended by:
              BlueDragon

              Too many are afraid.  I am.  I can't afford an arrest or physical harm.  A woos I am.

              It's difficult to be happy knowing so many suffer. We must unite.

              by War on Error on Sat Mar 23, 2013 at 09:42:54 AM PDT

              [ Parent ]

              •  i can't either (1+ / 0-)
                Recommended by:
                War on Error

                at my age and physical condition

                the most i could do would be to provide support via taking food and offering showers the way new yorkers did.

                i can't even join a march at this point.  but i could do a protest that didn't involve marching.

                i'm thinking more along the lines of general strike.

                but we don't have support for that either and it doesn't seem to do much in Europe.

                this is depressing and frightening.  we have so little power.  i pretend to my students that we have power because i've seen it in action, but in my heart, i know they are not totally wrong when they say that there is nothing to be done.

                •  I like the power of the purse (2+ / 0-)
                  Recommended by:
                  BlueDragon, cynndara

                  It is the one power we have left.  Boycotting can be very effective.  I love the Crush Rush activism that is working.

                  There's still lots that can be done, but the pressure has to be consistent and long acting.  Pump those kids up, we elders will need them to save us......

                  It's difficult to be happy knowing so many suffer. We must unite.

                  by War on Error on Sat Mar 23, 2013 at 09:58:41 AM PDT

                  [ Parent ]

        •  We do nothing (1+ / 0-)
          Recommended by:
          BlueDragon

          Because isolated, we have no power.  Power sufficient to rebel or resist power of this scale can only be found in organization with millions of others.  Organizing millions requires resources that are, once again, unavailable to the individual.  Most of the "great powers" of American politics have built themselves up step by step over periods of decades if not lifetimes.  Generations building on generations of solid growth, consolidation, opportunity, and the period of phenomenal American dominance from 1918-1970.  For an individual to rise to any kind of participation at the higher levels requires not only work and competence, but a blinding stroke or two of good luck as well.

          We're not conformist.  Most of the people you see working at WalMart hate the system with a great deal more virulence than you do.  They simply can't figure out a way to resist more than by passively avoiding as much of the system's parasitism as they can manage.

          •  i doubt they hate it more than i do (1+ / 0-)
            Recommended by:
            cynndara

            really.

            i have hated it since childhood, but you are right about the lack of power of the isolated.

            there a few if any real ways of avoiding the system.  damn few.

            'voluntary poverty' might be one but it doesn't sit well with me.

  •  You all seem to have mised my point (2+ / 0-)
    Recommended by:
    BlueDragon, chaboard

    I'll try it again. The majority of Americans have less than 10,000 in ANY savings account or retirement account. Of course 130,000 is not rich. My entire point was such a draconian tax would not affect most Americans. Settle down, Beavis!

  •  Rational reads (1+ / 0-)
    Recommended by:
    BlueDragon

       My computer is in hick-up mode today.   Try reading what is on the Guardian site and Naked Capitalism.
         There is still a lot of misinformation by a lot of sites, same name calling about lazy workers and ignoring that much of the debt that is being seen in Cyprus is a result of Troika demand they help Greece and then be held liable for the debt forced on them.     NC has probably the biggest picture of the entire state of play:

    http://www.nakedcapitalism.com/...

    This was from earlier in the week and is the background.

    Reading the above background then puts a lot of the huffing / puffing from Merkel, Troika, et al. into context - aka this is probably the first real attempt for the "free-market" to actually make average citizens pay for banking mistakes..and hopefully it will fail.  

    As I have often said - I'm not a banker / economists but I do read.

    •  free market is not involved (0+ / 0-)

      this is negotiations between governments - Cyprus, EU, Russia.

      "Free market" are those whose money is now endangered - the holders of large deposits in Cyprus banks.

      If anything, this is - finally - publically accountable governments (those of the EU) telling the capitalists that they´ve had enough.

    •  I can see (1+ / 0-)
      Recommended by:
      BlueDragon

      this as an effort on the part of ECB and the Germans to "spread the (non)wealth" outside of the EU, which can't easily afford much more of this, to their favorite local non-member -- Russia.  I mean, from Merkel's point of view, what's NOT to like in palming off 5 billion EUs worth of the costs of the Greek meltdown onto the pesky Russian oligarchs?

      Short-sighted, off course.  It's spring right now.  What happens next winter, when those oligarchs are controlling Germany's natural gas supplies?

  •  ???? (0+ / 0-)
    I think we would riot at a hint that 25% of our savings were going to be heisted to serve the deficit.
    People with over $130,000 holdings would "riot" ???

    Who at this site has $130,000?  


    "Just because you win the fight, don't mean you're right," - Funkadelic

    by AlyoshaKaramazov on Sat Mar 23, 2013 at 10:33:37 AM PDT

  •  I don't get the outrage. It's a wealth tax. (2+ / 0-)
    Recommended by:
    cynndara, marsanges

    I remember just a few months ago there was a popular diary here urging the US to adopt a wealth tax.

    Well, Cyprus has enacted a wealth tax. It may be bad policy. It may be good policy. But it's certainly legal.

    And this paragraph in the diary's is weird:

    Calling it a tax is such a sham.  The savings were created and taxed before tucked into the bank account.  Tax is paid on the interest.
    No. Tax paid on interest is an income tax. But in addition to income taxes, almost all jurisdictions in developed countries have various kinds of wealth or property taxes -- taxes on land and houses, taxes on luxury moveable property like boats, etc. There is nothing illegal about wealth or property taxes.

    Moreover, as the diary points out, but seems not to deal with, Cyprus's bank deposits dwarf its economy. That's because, like Mitt Romney's Cayman Islands, Cyprus is a off shore wealth haven. It's where Russian oligarchs and gangsters stash their funds out of view of Russian taxing authorities.

    I never thought I'd see the day when DK members would go apeshit over the idea of taxing the wealth of Russian oligarchs and gangsters as some sort of progressive cause celebre.

    •  this is not about taxing gangster and oligarchs (1+ / 0-)
      Recommended by:
      DrTerwilliker

      from my point of view.

      it is about the disasters extreme capitalism is creating all over the planet and the sheer hubris of the confiscation of savings no matter whose savings.

      the original proposal was to do this to every account, no matter how small.

      this 'adjustment' is meant to make the bitter pill less bitter.

      the gangster's and oligarchs can go to hell, but if this can be done to them and anyone else in this category, things have spun out of control.

      we don't KNOW precisely who this  will hurt or what the end result will be.

      if the eurozone is in this much trouble, can the rest of us be far behind?

    •  If it only covers bank accounts, it's not (1+ / 0-)
      Recommended by:
      BlueDragon

      really a wealth tax...  You'd need to tax other financial holdings (Stocks, bonds, CDs, goat cheese futures) as well as out-of-country holdings and property as well.  Seems a rather bizarrely targeted tax to me.

      I have over that amount, but I don't have that much in bank accounts, particularly given current interest rates.  I wonder how much of this money is in personal accounts vs corporate or collectively held accounts (Retirement plans and the like).

  •  This Is The Most Unlikely Rec List Diary EVER (1+ / 0-)
    Recommended by:
    HamdenRice

    Did I somehow slip into Bizarro World?

  •  "11. Thou shalt not allow a bank to fail." (2+ / 0-)
    Recommended by:
    BlueDragon, War on Error

    Spoken from somewhere other than Mt. Sinai.

    It seems that letting these banks fail would protect every dime of small-saver Euro money in the Cyriot banks.

    ECB guarantees such deposits. All the little people would come out O.K. You know how ECB and Merkel can't stand that.

    Even worse, the failed Greek bonds held by these banks would then be forced out on the market, where they are worth four two-week old mackerel each.

    This scheme, what we are seeing, leaves the banks to flounder.

    ECB cannot do an orderly dissolution for any failed bank. Period. So none of them can fail. And a pretense emerges that FREE MONEY at a 2:1 rate can live forever.

    It's insane. Unregulated banking at its worst.

  •  18-22%BOC>100K, 4%others >100k, 0%<100 (0+ / 0-)

    According to several tweets on different accounts giving
    @MegaGegonota as source.

     not verified

  •  this is fair (1+ / 0-)
    Recommended by:
    marsanges

    If you have more than the insured amount in a bank that goes under in the US you risk much more than a 25% haircut[you could potentially never see a dime of it].  This seems no different to me.  It strikes me as semantics to try to argue that the Cyprian banks aren't essentially bankrupt.

  •  Cypriots have guns. Bad move. (0+ / 0-)

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White -6.00, -5.18

    by zenbassoon on Sat Mar 23, 2013 at 02:03:55 PM PDT

  •  just another disturbing example (1+ / 0-)
    Recommended by:
    War on Error

    of the Durbin Principle

    "They [the Banks] frankly own the place."

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